Hiring and retail and home sales are strong in rural America, but that won’t be enough to overcome slow economic growth caused by a trade war with China and the lack of a trade agreement, a monthly assessment has found.
At the same time, however, the Rural Mainstreet Index inched into positive territory at 50.1 in September from August’s 46.5. Any score above 50 suggests a growing economy, while a score below 50 indicates a shrinking economy.
The index, a real-time analysis of the rural economy in 10 states, is based on a survey of bank CEOs in some 200 rural communities with an average population of 1,300.
Four of 10 bankers surveyed said their local economy is in a recession, “despite a $16 billion federal government support package this year and somewhat stronger grain prices,” said Ernie Goss, economics professor at Creighton University’s Heider College of Business, which produces the index.
Still, rural businesses continue to hire at a solid pace. Over the last year, the rural economy added jobs at a 0.7% pace, or half of the 1.4% pace of urban growth for the same period.
Home and retail sales in the 10-state area also remain strong. The home-sales index dipped to a still-solid 57.1 from August’s 57.7. And this month’s retail-sales index expanded to 52.8 from August’s 45.0.
“Bankers in the region reported a rebound in retail sales from August levels,” said Goss.
The confidence index, which measures bank CEO expectations for the economy six months out, reflected some of that resilience: It climbed slightly to 42.9 from August’s 40.0.